EasyJet : Results for the six months ending 31 March 2022

19 May 2022

easyJet plc

Results for the six months ending 31 March 2022

easyJet faces summer 2022 with optimism - with customers returning strongly to us whilst also driving a step-

changed revenue capability, we expect to deliver attractive continued improvement

• Headline loss before tax of £545 million (Reported loss before tax of £557 million)
• Radical network optimisation: >1.5m seats reallocated to strongest markets
• Step-changedancillary products delivering incremental revenue
• H2 operating CASK7 ex fuel expected to be close to FY19 levels
• Higher fuel and USD exchange rates layering additional cost in H2

Commenting on the results, Johan Lundgren, easyJet Chief Executive said:

"easyJet has reduced its losses year on year, at the better end of guidance. The pent-up demand and removal of travel restrictions provided for a strong and sustained recovery in trading which has been further boosted as result of our actions. These include the radical reallocation of aircraft which has seen more than 1.5m seats moved to the best performing markets and the step-change in our ancillary products delivering increased revenue - both of which have contributed to our total yield increasing by 9% compared to the same period in FY19. All of this is not only delivering now but with more to come in the future as even more passengers take to the skies.

"We have transformed the airline during the pandemic which has enabled us to emerge with renewed strength, underpinned by a product, network and service that customers really value.

"Since Easter we have been flying up to a quarter of a million customers and 1600 flights every day and in the second half leisure and domestic capacity will be above 2019 levels. It has been well documented that the industry is experiencing some operational issues so, as you would expect, we have been absolutely focused on taking action to ensure we have strengthened our operational resilience for this summer so we can deliver a great, reliable operation to our customers.

"We expect to operate 90% of FY19 capacity in Q3 and we have capacity on sale of around 97% of FY19 flying in Q4 with easyJet holidays now on track to carry over 1.1 million customers this financial year.

"And so, as we return to a more normal summer season, we are ready to capture the increased levels of demand right across our network. We are confident in our plans for summer which will see us reaching near 2019 flying levels and look forward to competing with our renewed strengths as a winner in the post pandemic recovery of European aviation."

Overview

easyJet has continued to allocate aircraft to the markets where we see demand at its strongest. In the second half of the year leisure and domestic routes have fully recovered with capacity at 113% and 104% of FY19 levels respectively, whilst business and city traffic continues to recover with demand currently below FY19 levels. Additionally, the steps we have taken to transform our ancillary offering are delivering significant levels of incremental revenue generation without cannibalising our ticket revenue.

The airline industry has recently been experiencing operational pressures, which mainly impacted easyJet through early April. easyJet has taken action to address these pressures, which includes; proactively managing the

schedule, reducing cancellations through various measures such as, boosting recruitment, and improving ID processing. Despite this, bookings continue to be strong as we have seen demand, post the impact of the Omicron variant, returning with the removal of travel restrictions. Booking patterns have remained shorter than they were pre pandemic, however in the last 10 weeks bookings have consistently been above the levels in the same period of 2019. easyJet holidays is continuing to build, as the UK's fastest growing holiday company and remains on track to carry >1.1 million passengers in FY22 with over 70% of the program sold.

Summer 22:

• Forward bookings for the third quarter are 76% sold and 36% sold for the fourth quarter.
• In the last 10 weeks, bookings have been 6% above the same period in 2019
• Easter holidays saw load factors of 90%
• Q4 Sold ticket yields are currently 15% above 2019 and load factors expected to be >90%
• Capacity recovery:

• 1. H2 Leisure capacity at 113% of FY19 o H2 Domestic capacity at 104% of FY19
• Holidays >70% sold and on track to deliver medium term target of £100m+ PBT Capacity:
• Q3 Capacity expected to be c.90% of FY19
• Q4 Capacity on sale is c.97% of FY19

Hedging

• easyJet is currently c.71% hedged for fuel in H2 of FY22 at c.US$619 per metric tonne, c.49% hedged for H1 FY23 at c.US$701 and c.20% hedged for H2 FY23 at c.US$807. The spot price on 17 May 2022 was around US$1,225.
• Carbon obligation for CY'22 100% covered at €19/MT

Financial Summary

• Headline loss before tax of £545 million (H1 2021: £701 million loss)

1. Total revenue increased by 524% to £1,498 million (H1 2021: £240 million) predominantly due to the increase in capacity flown and ancillary products continuing to deliver incremental revenue.

• 1. Group headline costs increased by 117% to £2,043 million (H1 2021: £941 million), primarily due to the increase in flown capacity.
• Reported loss before tax of £557 million (H1 2021: £645 million loss).
• 1. Non-headlineloss of £12 million (H1 2021: £56 million gain). Non-headline items consist of losses from the sale and leaseback of aircraft partially offset by restructuring provision releases.

	H1 2022	H1 2021	Change
	favourable/(adverse)
Capacity1 (millions of seats)	30.3	6.4	373.4%
Passengers3 (millions)	23.4	4.1	470.7%

Load factor2 (%)	77.3	63.7	13.6ppts
Average sector length (km)	1,131	1,261	(10.3%)
Total revenue (£ million)	1,498	240	524.2%
Headline EBITDAR (£ million)	(208)	(469)	55.7%
Headline loss before tax (£ million)	(545)	(701)	22.3%
Reported loss before tax (£ million)	(557)	(645)	13.6%
Airline revenue per seat (£)	47.61	36.93	28.9%
Airline revenue per seat at constant currency4 (£)	49.06	36.93	32.8%
Airline EBITDAR cost ex fuel per seat (£)	(42.45)	(94.09)	54.9%
Airline EBITDAR cost ex fuel per seat at constant currency4	(43.58)	(94.09)	53.7%
(£)
Airline headline loss before tax per seat	(17.80)	(108.07)	83.5%
Holidays contribution	(5.5)	(8.1)	32.1%
Headline EBITDAR Margin	(14.0%)	(195.8%)	181.8ppts
Headline ROCE	(12.0%)	(16.8%)	4.8ppts

For further details please contact easyJet plc:

Institutional investors and analysts:
Michael Barker	Investor Relations	+44	(0)7985 890 939
Media:
Anna Knowles	Corporate Communications	+44	(0)7985 873 313
Edward Simpkins	Finsbury	+44	(0)7947 740 551 / (0)207 251 3801
Dorothy Burwell	Finsbury	+44	(0)7733 294 930 / (0)207 251 3801

Conference call

There will be an analyst presentation at 09:00am GMT on 19 May 2022 at Nomura, One Angel Lane, London, EC4R 3AB.

Alternatively, a webcast of the presentation will be available both live and for replay (please register on the following link):https://stream.brrmedia.co.uk/broadcast/6274ee558eb4f178d1ef92ad

Alternatively dial in details are as follows: 0800 279 6877/[phone]

Revenue

Total revenue increased by 524.2% to £1,498 million (H1 2021: £240 million) in line with capacity increasing to

30.3 million seats (H1 2021: 6.4 million) because of pandemic-related travel restrictions being more relaxed than they were in the same six months last year.

Passenger revenue increased by 479.4% to £985 million (H1 2021: £170 million) as we flew increased levels of

capacity compared to the same period last year. Passenger RPS increased by 22.7% to £32.49 (H1 2021: £26.47) due to demand returning as travel restrictions eased in the early part of H1 as customers enjoyed the late summer season before a temporary pause in December and January as a result of the Omicron variant. Trading strengthened again in February and March as restrictions were removed.

Group ancillary revenue increased by 632.9% to £513 million (H1 2021: £70 million) as capacity increased. Airline

ancillary revenue per seat also increased by 44.6% to £15.12 (H1 2021: £10.46) as we continue to see incremental benefits from the new ancillary products which have been launched since H1 of FY21.

Costs

Group headline costs excluding fuel and FX gains increased by 94.2% to £1,684 million (H1 2021: £867 million), driven by an increase in capacity flown as easyJet continues to ramp up capacity.

easyJet recorded a £2 million gain from foreign exchange (H1 2021: £24 million gain), related to the impact of stronger Sterling on our net foreign currency-denominated liabilities.

The cost per seat performance continues to be impacted by volume. Airline headline cost per seat at constant currency decreased by 55.0% to £66.81 (H1 2021: £148.59). Headline Airline cost per seat excluding fuel at constant currency decreased by 59.0% to £54.71 (H1 2021: £133.51).

Non-Headline Items

Non-headline items are those where, in management's opinion, their separate reporting provides a better understanding to users of the financial statements of easyJet's underlying trading performance, and which are significant by virtue of their size and/or nature. These costs are separately disclosed and further detail can be found in the notes to the accounts. A Group non-headline loss before tax of £12 million (H1 2021: £56 million gain) was recognised in the first half. The significant items consisted of a £21 million loss as a result of the sale and leaseback of 10 aircraft and an £8m release from restructuring provisions.

Balance Sheet

During H1 easyJet repaid £300 million of commercial paper, clearing the final balance under the CCFF scheme. easyJet has no other debt maturities until the 2023 financial year. As at 31 March 2022 our net debt position was £0.6 billion (30 September 2021: £0.9 billion) including cash and cash equivalents and money market deposits of c.£3.5 billion.

Strategy Update

easyJet has prioritised six strategic initiatives that will continue to build on our structural advantages in the European aviation market and enable us to lead the recovery as travel returns.

• Network strategy
• Customer excellence
• Product portfolio evolution
• easyJet holidays
• Cost focus
• Sustainability

These initiatives, underpinned by operational and digital safety and a continued focus on our people, should result in strong shareholder returns being delivered.

Network Strategy

easyJet has a strong network of leading number one and number two positions in primary airports, which has proven to be amongst the highest yielding in the market. This enables us to be efficient with our network choices, with an emphasis on maximising returns.

easyJet continues to optimise its network to ensure capacity is deployed in the markets where we see the strongest demand. This has been done this summer through our network optimisation, where over 1.5 million seats have been reallocated across the network. This enables us to serve our customers in the markets where demand is the strongest.

We will seek to strengthen our position in key markets as the competitive landscape evolves. This has been demonstrated at London Gatwick where we are increasing our market share after reallocating aircraft to this high yielding base along with the addition of new slots. As well as growing in Gatwick, an extra five aircraft worth of slots have been added into the Greek Islands, where easyJet will now be the largest carrier this summer.

Our focused network strategy can be summarised as follows:

1. Lead in our Core Markets
   easyJet prioritises slot-constrained airports as these are where customers want to fly to and from. In our core markets, we are able to achieve cost leadership and preserve scale. We provide a balanced network portfolio across domestic, city and leisure destinations. Our scale enables us to provide market leading networks and schedules. We are maintaining our focus on country leadership in the UK, France and Switzerland and our city focus in the Netherlands, Italy and Germany.
2. Accelerate investment in Destination Leaders
   We will build on our existing leading positions in Western Europe's top leisure destinations to provide network breadth and flexibility. This will also unlock cost benefits, enabling us to manage seasonality and support the growth of easyJet holidays. It also ensures that easyJet remains top of mind for customers and is seen as the 'local airline' for governments and hoteliers.
3. Build our network in Focus Cities
   easyJet is building a network of key cities, broadening our presence across Europe. This is a low-risk way of serving large origin markets. We will base assets in Focus Cities where it makes sense from a cost perspective.

Customer Excellence

Despite the rise in living costs, consumer research suggests there is still strong appetite to travel due to pent up demand and people topping up savings during the pandemic. 1 in 2 respondents in the UK say limited opportunities to travel during the pandemic has made their holidays more important to them than before (ABTA travel in 2022).

The continuous removal of restrictions has benefitted business travel, specifically SMEs who were able to set the pace of recovery while large corporates migrated to hybrid working. We have begun to see the return of business travellers and easyJet is well placed to provide business segments with the network, schedule, product & value to enable growth.

We launched our nextGen brand campaign, highlighting environmental and inclusivity initiatives as well as our continued focus on delivering great value European travel.

easyJet aims to deliver a seamless and digitally enabled customer journey at every stage:

• Prior to travel: our 'direct is best' strategy is led by our digital channels, with an app/mobile-first mindset which makes travel easy for our customers. Confirmation and check-in summary pages now dynamically